The moon landing. I remember very well as a seven year old listening attentively to the 'one
small step' broadcast in 1969. The whole class was silent under the spell of our teacher's scratchy transistor radio.

It's one of my most strongly held memories of my childhood. I guess that reflects well on that class of seven-year olds. They stopped playing bullrush, sniffing with colds, and fighting over play-lunchs to listen attentively to the unfolding of one of humanity's most historic moments.

While I was still fondly remembering the Moon landing, the next news item struck.

I could do a review of the legal issues, but that would be just more legal-climate yadda yadda. I will just note that back in the early 1990s, the Bolger National Government not only considered that greenhouse gas emissions were an adverse effect under the Resource Management Act; they also considered the RMA to be one of the main tools to deal with global warming.

The first is cumulative emissions of carbon dioxide. Approving new coal mines
adds to cumulative global emissions of carbon dioxide. The second chart shows likely scenarios for temperature. The more carbon dioxide accumulates, the higher the likely temperature.

The facts are that each time a new coal mine is approved, we are just adding to the temperature overshoot above two degrees.

Why is it that the High Court can't apply this simple logic? Why are we even in a position where the High Court can sever the undeniable link between new coal mines, the volumes of carbon dioxide accumulating globally, and the inevitable temperature rise? What has has happened to our legal and planning systems to make this sort of decision possible?

To me this outcome - where the global effects of more GHG emissions are legally severed from approval of a new coal mine - is just as 'out of this world' as denying that the Moon landings even happened.

16 August 2012

What has happened to the hon Dr Nick Smith? The former Minister of Climate Change Issues, A while back he resigned from all his ministerial offices when his conflict of interest in the ACC case of his National-insider friend Brownyn Pullar became public.

Well Nick Smith is back and is promoting the extraction of unconventional gas via hydraulic fracturing.

..in the case of natural gas—increasingly the power industry’s fuel of choice, because gas reserves have been growing and prices have been falling—the study finds that warming would continue even if over the next 40 years every coal-fired power plant in the world were replaced with a gas-fueled plant.

07 August 2012

This post argues that the New Zealand Emissions Trading Scheme (NZETS) is "the weakest link" due to it's high exposure to the international carbon market. The strong "international linkage" is the the other side of the coin of the uncapped design of the NZETS. Both features reinforce just how ineffective the NZETS is in providing an incentive to reduce greenhouse gas emissions.

Yes that's today's bonkers metaphor for another wonky post on the NZETS. In addition to the observation that I would love to say "NZETS you are the weakest link. Goodbye!" there really is a relevant connection to the economics literature.

"Linking" of emissions trading schemes means that units from one ETS can be imported and surrendered by emitters regulated by a different ETS. There are papers and blog posts about international linkage.

The key economic benefit claimed for linking two or more ETS, assuming that they are otherwise sensibly designed, is that the lowest-cost ways of reducing emissions within the linked schemes become available (via emissions trading) to the emitters of the linked schemes.

An example. Pastoral agriculture may or may not have low-cost ways of reducing emissions. If agriculture has relatively high mitigation costs, then you are doing agriculture a favour by including it within a national all-sectors ETS, rather than just in an agriculture ETS. Agriculture can then just buy 'ways of reducing emissions' in the form of units from the cheapest seller - the emitter who can reduce emissions at a lower cost.

In 2011, 16.3 million units were surrendered by New Zealand emitters. Of which, 11.7 million units were imported international units (being 4.2 million CERs, 4.3 million ERUs and 3.2 million RMUs.)

Reaction to the Friday's MfE report was swift. Carbon foresters decried the fact that foreign units were swamping the NZ ETS in 2011 at the expense of units from NZ forestry. "..foreign carbon was the credit of choice for emitters in 2011. International credits comprised a whopping 71% of all units surrendered for compliance.."

BusinessDesk noted the that big emitters had chased the cheap foreign carbon units in preference to NZ units as European carbon prices dropped to historic lows, dragging NZU prices as low as low as $4.50 to $5 per tonne of carbon last week.

And if a small market where the compliance demand is 16 million units can import units from the international market where 977 million units exist, then a cap on domestic emissions is never going to be possible.